TY - JOUR
T1 - Pure altruism and misjudgement
T2 - A bad combination?
AU - Simonsen, Nicolai Fink
AU - Kjær, Trine
AU - Gyrd-Hansen, Dorte
N1 - Publisher Copyright:
© 2021 Elsevier B.V.
PY - 2021/12
Y1 - 2021/12
N2 - Stated preference studies on the value of health risk reductions have found valuations elicited from a private perspective to be both higher and lower compared to valuations elicited from a public perspective. Although relevant, the individual's ability to correctly predict the valuation that other individuals assign to the risk reduction has been insufficiently researched. We aim to verify whether individuals exhibit pure altruistic preferences and if this is the case, whether the presence of pure altruism leads to biased valuation of public risk reductions due to misjudgement about other individuals' preferences. We conduct a large-scale online incentivised experiment as a variant of a public good game in which the individual's final endowment is determined by choices made in the experiment. Results suggest that individuals act as pure altruists and hence try to account for the benefits obtained by others of being insured. The results also suggest that individuals fail to correctly predict other individuals' benefits from the insurance, which leads to non-optimal outcomes and biased valuations.
AB - Stated preference studies on the value of health risk reductions have found valuations elicited from a private perspective to be both higher and lower compared to valuations elicited from a public perspective. Although relevant, the individual's ability to correctly predict the valuation that other individuals assign to the risk reduction has been insufficiently researched. We aim to verify whether individuals exhibit pure altruistic preferences and if this is the case, whether the presence of pure altruism leads to biased valuation of public risk reductions due to misjudgement about other individuals' preferences. We conduct a large-scale online incentivised experiment as a variant of a public good game in which the individual's final endowment is determined by choices made in the experiment. Results suggest that individuals act as pure altruists and hence try to account for the benefits obtained by others of being insured. The results also suggest that individuals fail to correctly predict other individuals' benefits from the insurance, which leads to non-optimal outcomes and biased valuations.
U2 - 10.1016/j.jhealeco.2021.102550
DO - 10.1016/j.jhealeco.2021.102550
M3 - Journal article
C2 - 34794008
AN - SCOPUS:85119040204
VL - 80
JO - Journal of Health Economics
JF - Journal of Health Economics
SN - 0167-6296
M1 - 102550
ER -